An effective estate plan often contains several elements. A will serves as the centerpiece, but there are other elements, such as a trust, that you may want to consider adding when it comes time to revise what you have in place.
A trust is one tool that may prove invaluable to your loved ones. Getting one started will depend on a few basic factors, including which type of trust will benefit you and your family.
What does a trust do?
When you own assets, tangible and intangible, you may want to consider exploring the benefits of a trust for your estate planning. This is an account into which you can deposit anything taking it out of your ownership and granting it to another. You may name anyone you wish as the trustee or grantee of the trust, including groups of people, companies and organizations.
A trust allows you to implement rules to manage the contents. You can impose restrictions on the timing of releases from the trust to heirs based on age. If you die while your parents require a legal guardian, a condition of the trust may allow the guardian to access it.
Are there different types of trust accounts?
A trust account benefits your family in a variety of ways. During your lifetime, anything you remove from your financial inventory no longer has a bearing on your taxes. When you die, anything you put into a trust passes to those you name without traveling through the court probate process. This allows your family to get money faster during high financial stress.
Adding a trust may help diversify your estate plan and benefit you and your family before and after your death.